| Section 2 |
| Reading 3 |
The Shaping of the Modern World
Section 2 Reading 3:
Jean Baptiste Colbert (1619-1683):
Analysis of French Finances and Efforts to Improve Government Income
On the Financial Disorders in France
(277) As we have had only examples of want and necessity in our finances since the death of Henry IV, it will be well to determine how it has come about that for so long a time there has not been, if not abundance, at least a tolerably satisfactory income, - something else than dearth and destitution, some approximation of equality between output and revenue. . . .
During the twenty years immediately following the death of Henry IV, the superintendents of the finances either gorged themselves with wealth, - all the other financial oflicials following their example, - or, if they were upright men, they did not have sufficient penetration to perceive the abuses, malfeasance, thefts, and waste which went on under cover of their authority, and even under their eyes, so that the state was always in need. It even happened that the incompetency of the superintendents was commonly more prejudicial to the state and the people than their personal thefts, seeing that there never was a time when the (278) superintendents appeared to be more honest than from 1616 to 1630. . . .
But since the expiration of these twenty years the change in the character of the persons chosen to fill this post has not altered the fate of the state; on the contrary, the most pernicious maxims took root in their minds and controlled their conduct and, in the course of time, assumed such strength that they have come to be considered fixed and unquestionable, and it seems to be assumed that they are not endangering the state. These maxims were :
This realm can exist only in confusion and disorder;
The secret of finance consists solely in making and unmaking, in bestowing emoluments and new honors on old officers, in creating new offices of every kind and character, in alienating rights and sources of income, withdrawing these and then reestablishing them once more;
Causing the payment of taxes on all kinds of pretexts;
Increasing the indirect taxes and tailles, alienating rights, then reducing or withdrawing them to alienate them anew;
Consuming for current expenses the ordinary and extraordinary receipts of the two years following ;
Giving prodigious discounts for advances in cash, not only in raising exceptional revenue, but even in the collection of the ordinary revenue, more than half of which is consumed by discounts and interest on money advanced;
Giving the opportunity to the treasurers of the public funds, other financial agents, and farmers of the revenue of making immense profits; maintaining that the grandeur of the state consists in having a small number of persons who can furnish prodigious sums and astonish foreign princes;
Neglecting the farmed taxes and general receipts which constitute the ordinary revenues, in order to apply themselves actively to extraordinary sources of income.
All these pernicious maxims were so firmly established that the most able and enlightened persons connected with (279) the government of the state thought that in a matter so delicate it would be more dangerous to try a new policy than to submit to the existing evils.
It is not astonishing that superintendents of finance regulated their conduct by these maxims, since they found in them two considerable advantages: the first was that in this confusion they enjoyed plenty of opportunity to enrich themselves and to make important gifts to their relatives and friends and to all the persons of the court whose good offices they had need of in order to maintain themselves in all the disorder; and the second, that they were persuaded that this policy rendered their services necessary and that no resolution to remove them could be considered.
The Commercial Policy of Colbert: As Shown in Louis XIV's Letterto the Town Officers and People of Marseilles (August 26, 1664)
Considering how advantageous it would be to this realm to reestablish its foreign and domestic commerce, . . . we have resolved to establish a council particularly devoted to commerce, to be held every fortnight in our presence, in which all the interests of merchants and the means conducive to the revival of commerce shall be considered and determined upon, as well as all that which concerns manufactures.
We also inform you that we are setting apart, in the expenses of our state, a million livres each year for the encouragement of manufactures and the increase of navigation, to say nothing of the considerable sums which we cause to be raised to supply the companies of the East and West Indies;
That we are working constantly to abolish all the tolls which are collected on the navigable rivers;
That there has already been expended more than a million livres for the repair of the public highways, to which we shall also devote our constant attention; (280)
That we will assist by money from our royal treasury all those who wish to reestablish old manufactures or to undertake new ones ;
That we are giving orders to all our ambassadors or residents at the courts of the princes, our allies, to make, in our name, all proper efforts to cause justice to be rendered in all cases involving our merchants, and to assure for them entire commercial freedom;
That we will comfortably lodge at our court each and every merchant who has business there during all the time that he shall be obliged to remain there, having given orders to the grand marshal of our palace to indicate a proper place for that purpose, which shall be called the House of Commerce; . . .
That all the merchants and traders by sea who purchase vessels, or who build new ones, for traffic or commerce shall receive from us subsidies for each ton of merchandise which they export or import on the said voyages.
We desire, in this present letter, not only to inform you concerning all these things, but to require you, as soon as you have received it, to cause to be assembled all the merchants and traders of your town of Marseilles, and explain to them very particularly our intentions in all matters mentioned above, in order that, being informed of the favorable treatment which we desire to give them, they may be the more desirous of applying themselves to commerce. Let them understand that for everything that concerns the welfare and advantage of the same they are to address themselves to Sieur Colbert. . . .
From J.H. Robinson: Readings in European History 2 vols. (Boston: Ginn, 1906), 2:277-280.
Memorandum on Trade, 1664
From 1661 Colbert was for more than twenty years of responsible for the finances of France. He believed that material prosperity would raise the yield of taxes but that this prosperity would grow only with a managed economy: that is, with the mercantilistic encouragement of native industries and exports and the discouragement of imports from abroad. His memorandum to Louis XIV on trade (1664) summarized two generations of similar advice, using even statistics from pamphlet literature published fifty years earlier. Colbert's memorandum also shows how any practical application depended entirely on the support of the king.
Sire, it pleases Your Majesty to give some hours of his attention to the establishment, or rather the re-establishment of trade in his kingdom. This is a matter that purely concerns the welfare of his subjects but that cannot procure Your Majesty any advantage except for the future, after it has brought abundance and riches among his people. On the contrary, [the subject of trade] being unattractive in itself, Your Majesty will find it disagreeable to hear it discussed often, and, moreover, [efforts to re-establish) it will even lead to a decrease in current revenues. [For all these reasons] it is certain, Sire, that through Your Majesty's sacrifice of two things so dear and important to kings-one, the time that [Your Majesty] could use for his amusements or other pleasanter matters, the other, his revenue-[Your Majesty] by these unexampled proofs of his love for his people will infinitely increase the veneration and respect of his subjects and the admiration of foreigners.
Having discussed the reasons for and against the King's making efforts to reestablish trade, it will be well to examine in detail the condition to which trade was reduced when His Majesty took the government into his own hands [ 166 1 J.
As for internal trade and trade between [French] ports:
The manufacture of cloths and serges and other textiles of this kind, paper goods, ironware, silks, linens, soaps, and generally all other manufactures were and are almost entirely ruined.
The Dutch have inhibited them all and bring us these same manufactures, drawing from us in exchange the commodities they want for their own consumption and re-export. If these manufactures were well re-established, not only would we have enough for our own needs, so that the Dutch would have to pay us in cash for the commodities they desire, but we would even have enough to send abroad, which would also bring us returns in money-and that, in one word, is the only aim of trade and the sole means of increasing the greatness and power of this State.
As for trade by sea, whether among French ports or with foreign countries, it is certain that, even for the former, since in all French ports together only two hundred to three hundred ships belong to the subjects of the King, the Dutch draw from the kingdom every year, according to an exact accounting that has been made, four million UvresI for this carrying trade, which they take away in commodities. Since they absolutely need these commodities, they would be obliged to pay us this money in cash if we had enough ships for our own carrying trade.
***
As for foreign trade:
It is certain that except for a few ships from Marseilles that go to the Levant [the eastern Mediterranean], maritime trade in the kingdom does not exist, to the point that for the French West Indies one-hundred-fifty Dutch vessels take care of all the trade, carry there the foodstuffs that grow in Germany and the goods manufactured by themselves, and carry back sugar, tobacco, dyestuffs, which they [the Dutch] take home, where they pay customs duty on entry, have [the commodities] processed, pay export duties, and bring them back to us; and 'the value of these goods amounts to two million Uvres every year, in return for which they take away what they need of our manufactures. Instead, if we ran our own West Indies trade, they would be obliged to bring us these two million in hard cash.
Having summarized the condition of domestic and foreign trade, it will perhaps not be inappropriate to say a few words about the advantages of trade.
I believe everyone will easily agree to this principle, that only the abundance of money in a State makes the difference in its greatness and power.
***
Aside from the advantages that the entry of a greater quantity of cash into the kingdom will produce, it is certain that, thanks to the manufactures, a million people who now languish in idleness will be able to earn a living. An equally considerable number will earn their living by navigation and in the seaports.
The almost infinite increase in the number of [French] ships will multiply to the same degree the greatness and power of the State.
These, in my opinion, are the goals that should be the aim of the King's efforts and of his goodness and love for his people.
The means proposed for reaching these goals are:
To make His Majesty's resolution known to all by a decree of the Council ton Commerce] meeting in the presence of His Majesty, publicized by circular letters.
***
To revive all the regulations in the kingdom for the re-establishment of manufactures.
To examine all import and export duties, and exempt raw materials and [domestic] manufactures ....
Annually to spend a considerable sum for the re-establishment of manufactures and for the good of trade, according to resolutions that will be taken in Council.
Similarly for navigation, to pay rewards to all those persons who buy or build new ships or who undertake long-distance voyages.
Jean-Baptiste Colbert, Lettres, Instructions et Memoires de Colbert, vol. 2, ed. P. Clement (Paris: Librairie Imperiale, 1863), pp. 263, 268-71. Translated by Ruth Kleinman in Core Four Sourcebook
These documents on fiscal policy may seem boring [the word fisc, by the way, means "the state considered as a financial entity"]. But one of the real skills of history is finding out that really interesting issues lie under outwardly boring documents. [A modern example might be baseball statistics - when you know what they mean, they tell you lot; when you don't, they are just a lot of meaningless numbers!]
What is the basic problem that Colbert faces?
Why can't the state force the nobles to pay taxes? [Why do most people voluntarily pay taxes in the United States? Think about the notion of consent to taxation.]
Does this suggest a problem for absolutist governments?
Why can governments tax trade more easily than people? Your explanation here should give you some insight into why pushing overseas trade was so important.
If European countries were going to trade overseas, who were they going to trade with. [You should know that, even though some other countries developed better taxation systems, almost all governments in western Europe adopted the Mercantilist point of view that they should promote trade.]
Go to Caucus Discussion Conference
Source of this Text
Note to Web Users:
This reading is specifically for the Brooklyn College Core 4 Virtual Course. At a future time it may be moved, deleted or otherwise altered without notice. Do not link to this file! The same texts, in a more stable enviroment my be found at the Internet Modern History Sourcebook
| Contents Page |
Site Design: Paul Halsall |
©
created 2/1/1999 : revised 2/2/1999